Their own private seabeds

by Michael Richardson

SINGAPORE — A bitter sea dispute between China and Japan, Asia’s two biggest economies, is intensifying after the decision of a Japanese court Sunday to extend detention of a Chinese fishing boat captain until Sept. 29.

As state television in Beijing reported that China had suspended ministerial exchanges with Japan and halted talks on increasing flights, a Chinese foreign ministry spokesman warned that “strong reactionary measures” would be taken unless Japan released the captain without conditions.

Tokyo last week returned the Chinese crew and fishing boat it accuses of operating illegally near the Japanese- administered Senkaku Islands in the East China Sea and ramming two Japanese Coast Guard vessels while trying to escape. Beijing says the islands belong to China and has demanded the immediate return of the trawler’s captain. However, even if Japan complies, the underlying territorial and maritime boundary conflict with China remains unresolved.

While the latest incident should be a spur to resume negotiations to calm and hopefully settle their long-standing overlapping claims to nearly 130,500 square kilometers of ocean and underlying seabed, it may only have made a peaceful resolution more difficult to reach. The Senkakus lie in this zone and the rival assertions of ownership are used to bolster claims to the surrounding sea and its resources, including fisheries and seabed reserves of energy and minerals.

The dispute is being driven by a potent mix of nationalism, strategic mistrust and a quest for vital energy resources close to home.

Just as Southeast Asian countries worry that China will use its growing economic clout and military muscle to enforce its claims to sovereignty over disputed islands in the South China Sea and to jurisdiction over extensive offshore areas in the maritime heart of Southeast Asia, so Japan fears that it too may have to defend its claims against a resurgent and increasingly powerful China.

Japan’s ambassador to China has been called in for a dressing down at least five times since the dispute flared Sept. 7, including a highly unusual midnight summons to meet China’s most senior diplomat, state councilor Dai Bingguo.

The official Global Times newspaper warned Tuesday that Japan could no longer “intimidate or antagonize China without serious consequences.” China postponed a visit to Japan by a senior Chinese lawmaker scheduled for last week, as well as talks aimed at signing a treaty on joint gas field development in the East China Sea zone of dispute.

Unless the Chinese trawler captain is released soon, the next step may be an officially encouraged Chinese boycott of Japanese goods. China became Japan’s biggest market last year. It bought almost 19 percent of Japanese exports in the first half of this year as two-way trade rose nearly 35 percent on the same period in 2009, to reach a record high of $138 billion.

“The recovery of the long stagnating Japanese economy will have to rely heavily on China’s growing purchasing power, not only in consumer products such as electronics, but also industrial commodities including heavy machinery,” the Global Times said. “In other areas such as the regional security of East Asia, energy cooperation, nuclear nonproliferation and environmental protection, Japan depends on the cooperation of China.”

Indeed, one of the striking similarities between China and Japan is that each is acutely short of domestic oil and natural gas to power their economies. Yet this appears to be stimulating conflict, not encouraging cooperation.

China is already the second-largest oil user in the world after the United States. Consumption is expected to almost double by 2030 to 15 million barrels per day, from about 8 million bpd now — about half of which is imported.

Japan is projected to be using 5 million bpd of oil by 2030. Although Japan’s high level of energy efficiency is containing demand, it has virtually no domestic oil or gas reserves and is even more heavily dependent on imports than China.

Meanwhile, gas is becoming an increasingly important part of China’s future. The government plans to lift the share of gas in total energy use to 10 percent by 2020, from 3 percent in 2006, to cut pollution from extensive coal use. In 2007, as gas consumption started rising fast, China became a net gas importer.

It estimated that the East China Sea may contain gas reserves of between 175 trillion cubic feet and 210 trillion cubic feet, more than double the country’s proven gas reserves of 88 trillion cubic feat in January 2009. Japan’s estimate of the East China Sea’s gas potential is more conservative. An official survey put the figure at 7 trillion cubic feet, but that was way back in 1970 when the technology for identifying gas and oil reserves was less advanced than today.

China estimates that there may be 70 to 160 billion barrels of oil in the East China Sea. Non-Chinese estimates come closer to the middle of that range, at around 100 billion barrels.

Whatever the actual figures for undersea oil and gas in the area, both sides want to maximize ownership rights and this is contributing to assertive policies. Since 2006, China has been producing gas and oil from two fields in or very close to the sea zone contested with Japan and has begun to construct production platforms linked to several other discoveries in the zone.

Japan suspects that China is now preparing to start drilling at a disputed gas field in the East China Sea. In response, Tokyo is considering whether to conduct its own test drilling in the sea near the site of the Chinese offshore platform. If naval or paramilitary vessels were sent to guard these activities, it would raise the risk of skirmishing that could lead to an exchange of fire.

The eight uninhabited Senkaku Islands are not far from Taiwan, which also claims them. If there were an armed clash between China and Japanese forces on or near these disputed islands, would the U.S. respond to a call for assistance from its ally Japan? America has major military bases on Okinawa in the nearby Ryuku Island chain, which stretches in a long arc from southern Japan almost to Taiwan.

On a visit to Tokyo last week, Richard Armitage, former U.S. deputy secretary of state in the Bush administration, said the 1960 Japan-U.S. security pact covers the Senkaku Islands and the U.S. would be obliged to defend Japan if Chinese actions were to escalate. The Obama administration has not been as specific as this, preferring to maintain a position of strategic ambiguity.

Nonetheless, Japanese and U.S. forces plan to hold their first-ever joint training exercise to defend the Ryuku chain in December. And in what appeared to be an oblique warning to China on Sept. 8, U.S. Secretary of State Hillary Clinton said the Obama administration was “committed to maintaining the greatest military in the history of the world and, if needed, to vigorously defending our friends and ourselves.”

The stakes are very high indeed in the East China Sea dispute — for Japan, the U.S. and China. De-escalation of the crisis must be in their mutual interest.

Michael Richardson is a visiting senior research fellow at the Institute of Southeast Asian Studies, Singapore.